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Moonshot: Public R&D and Growth

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  • Shawn Kantor
  • Alexander T. Whalley

Abstract

We estimate the long-term effect of public R&D on growth in manufacturing by analyzing new data from the Cold War era Space Race. We develop a novel empirical strategy that leverages US-Soviet rivalry in space technology to isolate windfall R&D spending. Our results demonstrate that public R&D conducted by NASA contractors increased manufacturing value added, employment, and capital accumulation in space related sectors. While migration responses were important, they were not sufficient to generate a wedge between local and national effects. The iconic Moonshot R&D program had only modest economic effects for both the local and national space-related sectors.

Suggested Citation

  • Shawn Kantor & Alexander T. Whalley, 2023. "Moonshot: Public R&D and Growth," NBER Working Papers 31471, National Bureau of Economic Research, Inc.
    • Handle: RePEc:nbr:nberwo:31471
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    More about this item

    JEL classification:

    • H54 - Public Economics - - National Government Expenditures and Related Policies - - - Infrastructures
    • N12 - Economic History - - Macroeconomics and Monetary Economics; Industrial Structure; Growth; Fluctuations - - - U.S.; Canada: 1913-
    • N72 - Economic History - - Economic History: Transport, International and Domestic Trade, Energy, and Other Services - - - U.S.; Canada: 1913-
    • O32 - Economic Development, Innovation, Technological Change, and Growth - - Innovation; Research and Development; Technological Change; Intellectual Property Rights - - - Management of Technological Innovation and R&D
    • R11 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - General Regional Economics - - - Regional Economic Activity: Growth, Development, Environmental Issues, and Changes

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